The need for diversification of the nation’s economy has never been more imperative than now, especially with the dwindling oil prices in the international market. Unless urgent steps are taken to diversify the nation’s economy, there is a great economic danger ahead of us.
Just about few months ago, many state governors were unable to pay workers’ salaries and meet other recurrent expenditure due to a sharp fall in oil revenue. A situation where states had to borrow to pay salaries is the worst case scenario of how bad an economy can be.
As a way of preventing the re-occurrence of the embarrassing situation above, I propose the following ways through which the country’s economy can be diversified.
Among these various ways is agriculture. Agriculture is one of the ways or means by which the government of any country that is serious about feeding its populace and raking in foreign exchange can use to improve the living standard of its people, as well as generate revenue for infrastructural development. Nigeria can improve her economy by showing interest in agriculture through formulation and implementation of good agricultural policies, thereby turning around the economy.
Agriculture, if given the needed attention, is capable of creating about 70 per cent of jobs for the unemployed youth. Unemployment today is one of the greatest challenges of this country, and the Muhammadu Buhari led administration can tap into it to reduce the high youth unemployment rate. Therefore, agriculture, being a sector that requires a large labour force, can help create employment for the large unemployed able-bodied men and women in the country.
Government partnership with private investors in agriculture, which stands at about N1.23 billion now, can grow in four-fold to N4.9 billion between this year and 2019 if this administration’s agricultural policies do not threaten the investments already in the sector. With this, many foreign and local investors will invest more in this sector of the economy if the policies are right.
The entertainment sector is also a very viable sector for the diversification of our mono-economy. The Nollywood, for instance, employs a large chunk of unemployed Nigerians and also generates significant revenue for government. The music industry as a component of the entertainment industry is also not left out of this, as the industry players have been portraying the nation’s image in positive light both within and outside the country. Therefore, to fully utilise the potentials of this sector, there is need for government support through creation of the necessary enabling environment for the industry and stakeholders in the industry to thrive. The government must make and enforce laws to eradicate, or reduce high level of piracy in this sector. This will help maximise the benefits in this sector to the country vis-à-vis our Gross Domestic Product (GDP).
A manufacturing country stands the chance of benefitting from devaluation of currency as it reduces the prices of the exporting country, but a situation where you don’t export your goods to other countries, it can be very dangerous to the economy. The manufacturing sector is another very important sector that can rake in a lot of revenue for the government and provide jobs for the teeming unemployed youth. Instead of depending on oil, whose price is not determined by the country but the international market, it is better we look inward into the manufacturing sector to fully maximise the benefits of that sector of our economy. There are, however, several challenges confronting this important sector, ranging from multiple charges by government agencies, to sourcing for foreign exchange from the parallel market. This has, as a result, made raw materials more expensive and in turn, resulted in the increase in production cost.
Basically, the manufacturing sector is heavily dependent on energy. Power supply has been erratic and insufficient gas is bought with foreign exchange; this makes the prices of locally- made goods exhorbitant.
Granting tax holiday and waiver to infant industries and provision of good road network, electricity, healthcare facilities, among others, will help boost this sector and grow the nation’s economy.
The less we depend on oil, the better for us as a nation; a situation where about 90 per cent of the country’s revenue comes from the oil sector portends great economic danger for the economy and, therefore, the situation must not continue, hence diversification options offer a way out.